CRTC kills Bell-Astral deal, saving TSN 690

The larger story is that the Canadian Radio-television and Telecommunications Commission has rejected an application from BCE Inc. to acquire Astral Media Inc. This means that the companies will remain independent, and among other things CJAD and CTV won’t be owned by the same company.

This is the best possible outcome for TSN Radio and its fans. Any decision allowing Bell to acquire CJAD would have meant moving Canadiens games there, and TSN would have either been converted to French, sold or shut down.

The question is what will Bell do now. Does it still plan to launch RDS Radio in Quebec? If so, on what frequency and where? (The number of vacant AM frequencies in Monteral is going down fast.) Many people were looking forward to a French sports station that could take over where CKAC left off. Even many TSN Radio fans angry with the application said they would love to see a French-language all-sports station alongside the English one.

Requests for comment from people at the station were passed up the chain until I got an official “no comment” from Greg McIsaac at TSN. But privately, station staff are thrilled. As are fans, who expressed delight on Twitter. The language change would almost certainly have meant job losses at CKGM and possibly CJAD as well as the latter incorporated programming from the former.

In its angrily-worded statement, Bell also accused the CRTC chair of impropriety, saying he had met with Bell’s competitors but not with Bell. As the CRTC tells it, this is correct, but only because Bell had an application in front of the commission and it would have been improper to meet with Bell. The commission also says that at no time did the other companies discuss the Bell application with the CRTC ex parte.

Steve, I never understood the logic behind the termination fee. It’s not like Bell backed out at the last minute; they’re no happier today than Astral is. Why is Bell being punished for a decision the CRTC made?

Is it a “penalty” for being negligent in either the application process or at the hearings? I presume it’s a condition that Bell and Astral arrived at in negotiations and maybe it’s there as an incentive for Bell to do their best and not waste everyone’s time?

So Astral can go this a few more times pocketing $150 million each time?

Steve, I never understood the logic behind the termination fee. It’s not like Bell backed out at the last minute; they’re no happier today than Astral is. Why is Bell being punished for a decision the CRTC made?

The fee was a condition by Astral to agree to the purchase. It’s common in large corporate mergers to have fees like this in case deals don’t go through, for whatever reason. Even with the deal dead, Bell got to look at Astral’s finances, and both companies spent an awful lot of resources in going before the CRTC. Don’t think of it so much as a punishment as much as an insurance policy. Bell wanted to buy Astral, and that was the price it was willing to pay in case it didn’t work out.

Steve – I’d just like to correct your statement a bit. What is “common” on business transactions of this size of what is referred to as a “break-up fee”. This is almost exclusively a fee paid by the (proposed) *acquired* to the acquisitor in the event that, for any reason prior to the effective date of the arrangement, the acquiring company backs out (and this can include to accept an alternative bid.) The fee that Bell would have a fee due Astral – and I stress “would have” since the fact that Bell is still engaged in regulatory approval of the deal, via it’s proposed appeal to the federal Cabinet (it could also go to the federal Court if it chooses) meets the terms of the clause in the arrangement because it does not mean it has formally walked away itself yet – is actually extremely rare.

Bravo to Mr Blais and his fellow commissioners….this decision
Was the right one in all respects. To all at TSN 990 , the ridiculous
Irony of rooting against your overlords and celebrating in silence
Is a great story….have a drink or 10, Wayne and co.
The watered down compromised “sports” content we would have been served
At CJAD is now just a bad dream !!!

You know, it’s funny. I figured Bell would be a little pissed off at the decision, but their press release is beyond rational.

I actually think it’s sort of like a bully who one day finds himself on his ass, his usual victim as suddenly grown a pair and kicked the bully in the nuts and knocked him on the ground. The CRTC for years has been the lapdog for big business looking for massive consolidations and the means to build towards oligopoly. Today, the CRTC said “enough of that crap” and sent Bell packing.

For Bell (and for that matter any of the biggest media companies) it’s a clear sign that their days of growth may be over, at least until 2017. If the CRTC stands up and applies the “best for consumers” measurement for every deal, it is very unlikely that many new mergers and mega-buyouts will get approved. Growth now is likely to be much more organic, with companies like Bell required to at each step apply for new licenses in markets and justify their existence, rather than just buying out existing players and consolidating the market.

I can’t help but think that if the CRTC had been a little tougher and a little more considerate of the consumer, they would likely have refused the CTV / affiliate station clumping under Bell media as well. That can’t be undone, and that is really too bad.

We can only hope that the federal cabinet has
Better things to do……..you are absolutely right on your
Assertion that the CRTC grew a pair……the growl they
Conveyed during the hearings, really had some bite behind it…..

OK now its back to listening to billionaires fighting with millionaires
In the world of hockey !

Bell will do anything to get this deal the green light approval, unfortunately I don’t think the Cabinet (Heritage Minister James Moore) nor the (Privy Council Chair Wayne Wouters) will send a directive back to the CRTC for a re-hearing, I don’t care how many lobbyists or political friends they got, it’s simply not going to happen, the Conservative government will not pounce on their newly appointed Chairman Jean Pierre Blais, I think this Government will let Blais set his own standards and possibly use him to help rewrite the broadcasting act. Mr. Blais is an exceptionally intelligent man when it pertains to broadcasting law and policy, don’t forget his legal background and understanding of the CRTC, he at one time managed the entire CRTC as it’s executive director under the Liberal’s (Frulla, Francis Fox, Bertrand). I truly feel he cares about ordinary Canadian’s from coast to coast and I think he took the time to look and correct the shambles Von Fickenstein left behind, I don’t think Blais can be bought and sold, I think he’s an original that mirrors some of the same qualities and disciplined nature that the great late Pierre Juneau had and used to build a competitive, creative, innovative broadcasting business, nobody got smoke past Juneau’s mirror, he was tough man, but also greatly endeared and respected. Getting back to Bell, George Cope has absolutely no respect for anyone but himself, his bonuses and his shareholders. George, some advice to you and John Gotti Chief Legal & Regulatory Officer Mirko Bibbic is to hire a PR firm and speak polite, don’t act like a cry baby, you are very fortunate with what the Commission has given you so far, learn some class Sir. The consumers are the main reason why Blais took this stance, it is simply because he cares and he didn’t want play policeman between all these vertically integrated monopoly players, if this deal was approved, he would need to deal with complaints of fairness, content sharing, royalties, subscriber fees, OTT from all the competitors, dealing with these complaints would burn him out before a years time. Bell knows this will be a tough one at the Federal court, Astral tried against Cogeco (Corus Quebec Acquisition overlimit exception) and miserably failed, I don’t think the court will even listen. The test will eventually be back on Blais when another monster (Monopoly Player) tries to gobble up Astral Media

I was wondering what would happen to Ted Bird if this deal had actually gone through. Seems like he’s bounced around enough for a while now, and hadn’t he singed a two-year contract with the station? Would he have had to sit out any non-compete clause that might have been in that contract? (Unless of course Mr. Bird is bilingual…and either way I wasn’t holding my breath for Ted & terry to reunite anytime soon). Do we know what’s in the works for 990 after the simulcast ends?

I was wondering what would happen to Ted Bird if this deal had actually gone through.

Same thing that would have happened to other TSN 690 staff. The best of them would have gotten jobs at CJAD, and the rest let go. I’m not sure what their contracts say, but getting rid of staff always has costs to it.

Do we know what’s in the works for 990 after the simulcast ends?

The CRTC has already given a licence to Dufferin Communications to startup an LGBT-themed French-language music and talk station on 990 after it’s vacated by CKGM. (It’s described here.) It will be a while before they’re under way. I would guess a launch would come next fall. They have until October 2013 to launch unless they get an extension from the CRTC.

There wasn’t much chance of that, at least in the short term. For now it means CHOM remains an Astral-controlled rock station instead of a Bell-controlled rock station. But if Astral is still interested in selling itself off, then we could see more acquisition drama.

Something more useful could be done with 730 other than moment by moment traffic reports

CKAC is owned by Cogeco, so it’s not affected at all by Bell and Astral. The thing that’s most likely to change Cogeco’s mind on CKAC would be cutting its $1.5-million annual subsidy from the Quebec transport department.

You are right Alex, Bell is acting like a bully. They say they have the best interest of the consumer in mind but their first reaction is to ask the Cabinet to help them. If they really had the consumer in mind they would have listened to them (via the 700-1000 interventions) and would have put their tail between their legs and went off quietly. They are money hungry and the last thing on their minds is the public.

I think THE story is that Bell’s attempt to switch the sports station from English to French set off all the alarm bells at CRTC HQ in Gatineau. I think that killed the deal before they even appeared at the hearings. The outcry from Montreal’s English community (almost 800 interventions) was unbelievable. But Bell slapping the faces of the CRTC commissioners who voted to give them the clear channel 690 license only months earlier was the last straw.

Look at what happened:

CRTC grants Bell the license to a clear channel so it can increase the audience for their hockey broadcast. CRTC said at the time it was the best use of that English frequency.

A few months later Bell announces it wants to turn its back on the English community and switch the station to a French language sports station.

That was the slap to the face of the CRTC commissioners who voted to give Bell the clear channel frequency. They were pissed and felt lied to by Bell.

More than 800 angry emails and interventions were filed by Montreal anglos outraged by Bell’s decision to take away their English sports station. New CRTC chairman took note of the protest. He says he didn’t take summer holidays because he was too busy reading all the interventions.

Now, imagine if you’re at the CRTC, how would you feel by Bell’s actions. They had to be wondering, if Bell thought they could get away with this at that time, what would they be like if they became even larger with the purchase of Astral.

Bell shot themselves in the foot with their plans to switch the English sports station to a French station. It was their arrogance that did them in. The new CRTC chairman sent Bell and all the other BIG media empires a message and it was simple: DON’T F*CK WITH ME.

I think THE story is that Bell’s attempt to switch the sports station from English to French set off all the alarm bells at CRTC HQ in Gatineau.

I have no reason to believe this is true. The decision does not mention CKGM at all, except to say that since Bell’s application to change its licence is contingent on the Astral purchase, it is denied as well. It would have been nice to see the CRTC explore the issues related to CKGM specifically, but the larger issue was decided on market share, not because of one radio station.

A few months later Bell announces it wants to turn its back on the English community and switch the station to a French language sports station.

I’m sure you saw how Tom Pentefountas grilled Bell’s Mirko Bibic on how just a year prior the point was to better serve the English-speaking population. Bibic then said something along the lines of, “yes, but things have changed.”

I refuse to believe that the Bell/Astral merger was entirely concocted in 2012. I’m sure that was in the works for a long time.

I felt the same way Mr. Kowch..A friend of mine went to one of the hearings at the Palais when the CRTC panel was grilling Bell about the linguistic switch, they had keyed in on that aspect, so you know they were upset with that…

Maybe Bell will start listening to their consumers and customers and less to the shareholders..God Bless CRTC Chairman for staring down a big faceless corporation…my kind of guy…

@ Fagstein..do you know if any Bell bigwigs read your blog..so they can see the joy of those of us posting comments here.

As much as I’d love to think this is the CRTC staring down a “faceless corporation” as the heroic knight fighting for the Canadian consumer? Seems the Canadian consumer I’ve seen for many years has demanded American Super Bowl commercials, the end to Simultaneous Signal Substitution, and (the more tech-oriented anyway) unfettered access to Hulu, American broadcasting websites, and Netflix free of Canadian content rules. When the CRTC starts delivering on that – or anything related to content *access* – I’ll join the converted believers.

Seems the Canadian consumer I’ve seen for many years has demanded American Super Bowl commercials, the end to Simultaneous Signal Substitution, and (the more tech-oriented anyway) unfettered access to Hulu, American broadcasting websites, and Netflix free of Canadian content rules.

Simultaneous substitution is done for the benefit of Canadian broadcasters more than consumers, certainly. Though the alternative could be not allowing the distribution of U.S. television stations in Canada.

As or Hulu, U.S. websites and Netflix, the CRTC has no say in those and imposes no content or other restrictions on them. They’re blocked in Canada because they choose to block themselves in order to respect contractual agreements with Canadian rights-holders (and, in some cases, because of copyright or other legal reasons that aren’t related to the CRTC).